Govt eliminates Rs3.4tr power sector burden

January 01, 2026 (MLN): Independent Power Producers (IPPs) eliminated a cumulative financial burden of Rs3.40 trillion on consumers and the national exchequer through successful and transparent renegotiations.

As a result, electricity tariffs were reduced by Rs8.35 per unit for domestic consumers and by up to Rs16.68 per unit for industrial consumers, as outlined in the Power Division’s annual performance review for 2025, according to APP.

The report attributes this achievement to wide-ranging reforms, stronger financial discipline and improved governance in the power sector, backed by consistent policy direction and effective decision-making.

These measures helped resolve several long-standing challenges while supporting progress toward a cleaner and more sustainable energy mix.

Further savings were achieved through the shutdown of inefficient and outdated power plants, easing an additional Rs7billion burden on electricity users.

To support economic activity, a targeted relief package of Rs22.98 per unit was extended to industrial and agricultural consumers, providing a boost to productivity and growth.

The government also cancelled surplus power projects with a combined capacity of 9,500 megawatts, resulting in a further relief of Rs 1 per unit for consumers.

At the same time, circular debt was reduced by Rs780bn without contracting new loans, a move described in the report as a major fiscal milestone.

The removal of the Rs 35 PTV fee from electricity bills was another step aimed at addressing a long-standing public concern.

On the structural front, the privatization process for three power distribution companies (DISCOs) was initiated during 2025 to enhance efficiency and service quality.

In support of cleaner transport, tariffs for electric vehicle charging stations were cut by 44%, encouraging the shift toward environmentally friendly mobility.

The report also highlighted relief measures for flood-affected regions, including bill waivers and flexible payment arrangements.

Consumer empowerment and transparency were strengthened through the launch of the “Apna Meter, Apni Reading” mobile application, allowing users to submit meter readings directly.

In addition, the introduction of the 118 helpline aimed to ensure equal treatment and eliminate preferential service.

Competitive and transparent procurement practices led to a 40% reduction in smart meter prices, with improvements in the smart metering system expected to generate annual consumer benefits exceeding Rs 100bn.

The report noted that 55% of the country’s electricity generation now comes from environment-friendly sources, placing Pakistan among leading regional players in green energy adoption.

Reiterating its policy direction, the Power Division said electricity supply to domestic and industrial consumers would continue to align with international pricing and service standards.

It expressed confidence that the momentum of reforms, transparency and public relief would remain strong throughout 2026.

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